Despite a rocky start for its tablet experiment, Microsoft Corp. (MSFT) is reportedly prepping its second generation of Surface tablets for this holiday shopping season. The Surface Pro 2 is expected to receive a Haswell Core series chip from Intel Corp. (INTC).

I. First Gen Surface Pro Was Sunk Largely by it's Intel Processor

Before 2010 no tablet had achieved strong enough sales to be characterized as a hit and the market was considered a niche space. Then in 2010 Apple, Inc.'s (AAPL) iPad debuted, posting stunning sales. A key to its success was its decision to dump the power-thirsty Intel processors that littered its underappreciated Windows predecessors and instead adopt a weaker but more power-efficient core design from ARM Holdings Plc. (LON:ARM). Thanks to the ARM chip, the tablet boasted a battery life of 10 hours -- a key selling point.

The deal breaker for many was the high price ($799 for 64 GB and $899 USD for 128 GB after the latest discount) coupled with the poor battery life. The Intel chip shaved the ample 7-hour battery life of the ARM-equipped Surface RT down to a little over 4 hours. Arguably, Intel is to blame on both of these counts as it demands up to $300 USD more for its power-hungry chips, versus popular ARM competitors.

To make matters worse, the tablet at times felt sluggish during heavy use with "only" 4 GB of RAM and the Windows 8 OS consumed much of the storage, leaving only 83 GB free on the 128 GB Surface; 23 GB on the 64 GB Surface. By contrast the iPad -- which requires about 10 percent of storage to be free, plus room for the OS -- offers about 105 GB for the 128 GB version and 54 GB for the 64 GB version [source]. It appear the Windows recovery technology is primarily to blame -- of the 10.4 GB allocated for Windows, 7.9 GB of it is reportedly for recovery.

But the pivotal question remained what to do about the power-hungry Intel chip. It appears Intel has sold Microsoft on the idea of a Haswell brain for the Surface 2. A recent analysis by AnandTech showed Intel making serious power-efficiency gains with Haswell, with a projected battery life of 8 hours with a 42.5 Wh battery. Of course these numbers were based on Apple's OS X and iOS -- but they suggest that if Microsoft does its homework on the firmware front, their may be hope that the Surface Pro 2 fixes the abysmal battery life of its predecessor.

Haswell is offering 8+ hours of battery life on a 42 Wh battery.

The aforementioned tests were done on a Haswell ULT processor (13.5 W TDP). In June Intel also announced an even more efficient ULX line (10 W TDP) (with 'Y' tacked onto the chip numbers), which could bump battery life even higher. If Microsoft can get it hands on ULX chips, it has a shot at least doubling the battery life of the first generation Surface Pro.

The Surface Pro 2 is also expected -- according toNeowin -- to pack a "refined" kickstand, improving on a popular feature in the first model. It's also expected to bump the memory to 8 GB. TechRadarreports that other Surface Pro 2 rumors point to NFC, wireless charging, an LTE variant, and 802.11ac Wi-Fi support.

The only official word from Microsoft is that it has committed to "updates" as noted in a video from Microsoft captured byZDNet. However AdDuplex -- which claims to be the largest Windows 8/RT-specific advertising network -- has noted Surface 2 and Surface Pro 2 devices are already logging internet hours, indicating that Microsoft is likely dogfooding prototypes in preparation for a launch.

Its called predatory pricing and there's been a shit load of cases of this kind in the past century. You cannot sell below cost. No sane entrepreneur would do that, unless it wants to drive competitors out of the market, or it want to promote a bundled product.

It looks cool now. What if Microsoft dies, Apple dies, Google wins then have the new monopoly over computing devices (phones and tablet siunce pc are dying) and cloud services? It will remain free? you think? Seriously? It will continue to give android away to Samsung once they win?

Xbox and PS3 are sold at a loss. I agree with the original poster however Google is free to do what it wants with Nexus devices if anything it will only raise the bar for Microsoft to deliver something as good or better. So whichever way you go its good for the consumer.

The whole debacle with IE and Microsoft having to include other browsers is just governments at its most unintelligent.

Perfectly ok to sell below cost. It is done all the time. Surface pro has failed for a lot of reasons. In addition to the hardware shortcomings, which in my view are not as great a reason as they are given credit for, is Microsofts abysmal marketing. It is a simple fact that you cannot sell product that you don't have. Whoever it was in microsofts marketing team that thought not actually having any to give retailers on launch day was ok is a damn idiot. A huge number of Day 1-3 buyers are very much like impulse buyers. If you make them wait for 2 or more weeks to get one because of lack of product they will change their minds. That is where Surface pro went down the tubes. There were none to buy at launch which gave potential buyers time to essentially talk themselves out of it.